Innovations in the Pharmaceutical Industry

The pharmaceutical industry is one of the world’s most important production sectors. However, over the last decades, pharmaceutical companies have been facing the urgent need to improve and keep their performances under tight control, an activity they are historically behindhand with, compared to other sectors, such as food or electro-mechanical industries. The increasing speed of new product development, the intensity of early generic competition, the exposure to loss of revenue following patent expiration, the higher regulatory hurdles on top of a declining R&D productivity – especially when compared to the biotech industry – presented a future with lower growth prospects than in the past for the pharmaceutical industry. Those players who tried to react to this negative contingency through merger and acquisition operations, had later found themselves in critical conditions in terms of coordination difficulties and excess of capacity in several production plants scattered all over the world. Now, this industry has to demonstrate that it can deliver better returns on investment than in the past by changing many aspects of how it has operated up until now. Indeed, this means aligning to a process which started years ago in several other industries: pharmaceutical companies must concentrate on all those factors that can allow them to operate cost reduction without decreasing quality and service level, while simultaneously pushing for the introduction of new products, which is one of the most relevant competition drivers for the pharma industry. Other industries have proved that it is possible to leverage process efficiency to spur innovation, help open new market opportunities, and shift cost and risk paradigms. Pharmaceutical companies that are at the leading edge of process excellence are likely to emerge as the true winners.